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Property Loan Commitments Increase

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Owner-occupiers make the most of the current favourable terms of lending, new data from the Australian Bureau of Statistics shows. Based on the most recent data, the total value of home loan commitments continues to rise month-on-month, largely driven by owner-occupiers.

In September, the value of new home loans rose by 1.1 percent, following an increase of 3.8 percent in August. Compared to September 2018, the first positive year-on-year outcome since mid-2018, new lending commitments are now up 5.6 percent. The growth was driven largely by an increase in loans to owner-occupants of 3.2 percent.

Over the year, the value of new lending commitments for owner occupier dwellings excluding refinancing increased by 5.6 percent and for investment dwellings excluding refinancing decreased by 13.6 percent at September 2018 levels. New loan commitments for owner occupier dwellings except for refinancing rose 2.5 percent and in September 2019 investment dwellings excluding refinancing rose 1.6 percent.

The number of owner-occupier first-home buyers borrowing commitments dropped 1.9 percent, while the number of non-first-home buyers lending commitments rose 5.6 percent in seasonally adjusted terms. Investor mortgage loan commitments dropped by 4 percent in September. ABS data also showed a 1.9 percent drop in lending commitments to first-time home buyers, this year’s first decline.

First home buyer figures are down 6.8% compared with September last year before interest rate cuts and serviceability changes were introduced. According to ANZ Research, these results appear to indicate that, overall, the Reserve Bank of Australia’s cuts to the official rate cuts are stimulating increasing property demand.

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